The Reckoning

March 8, 2011

This is going to be a busy week. The deadline for filing legislation is on Friday. So expect a flurry of miscellaneous bills and issues and press releases – on top of the committee meetings and headlines and rumors and general bustle.

But if you can get your head above the noise – and if you’ve got a strong stomach – you can get a fascinating look at the state budget, how it’s been broken, and what it’s going to take to fix it.

Connecting the dots

Last week, a collection of very basic data was released that breaks down, county-by-county, what the proposed state budget could mean to communities across Texas.

In Travis County, it says, school districts are looking at nearly $191 million less than they’d normally expect from the state. If that doesn’t change, it means one of two things: a big-time property tax increase to make up for the legislature’s lack of commitment, or cuts on a scale of 4,750 job losses in county school districts.

But wait. There’s more.

As you know, whenever spending occurs in one part of the economy, it triggers activity in another part of the economy. And according to the table, more than 6,000 private-sector jobs are dependent on the groceries that those school district employees buy, the clothes they wear, the mortgage or rent they pay, the movies they go to, the gas they put in their cars, the restaurants where they eat, etc.

So if the proposed budget goes through, the study says, you can expect a hit to the Travis County economy equal to about 11,000 school district and private sector jobs. Expand to the five-county Austin region, and you’re looking at more than 8,000 school district jobs alone, and more than 20,000 jobs total.

Clearly, this would be a horrible blow, particularly when we’re already looking at the possibility that thousands of state jobs could also vanish under this budget.

First the bad news, then … more bad news

Unfortunately, the data doesn’t get much better from there.

Another table shows that Austin Community College is looking at funding levels that basically ignore cuts that have already been made, the region’s population growth, the increased cost of health insurance, and the fundamental role ACC is playing in training our work force. The result – $33.6 million that will have to be made up through things like property tax increases and layoffs.

And a third table says Travis County stands to lose $791.5 million in health and human services money from the current budget, which would put us $1.36 billion down from where we need to be given population growth and the cost of medical care.

Worse yet, in that scenario, the state would save only a little over a half-billion dollars, because $800 million of that total consists of lost money that we send to Washington in our federal taxes but won’t be getting back.

And that’s the situation facing communities all over the state. The Dallas Morning News took a look at the numbers and said more than 18,000 school district and related private sector jobs are at risk in Dallas County alone.

Again, take a look at the numbers to see what your community is facing.

Don’t take my word for it

But really, if you want to know how tough this budget is, ask someone who’s responsible for it.

Right now, two subcommittees of Texas Senate budget writers are working furiously to try to get a handle on the size of the budget problems in health and education, and what to do about them.

Also last week, the subcommittee trying to cut nearly $10 billion from the state’s Medicaid program (which primarily helps children and seniors) got hung up when members found they were having trouble slicing even 5 percent of that total.

It turns out that in both of these areas, there really isn’t that much so-called “fat” to cut. The only questions are whether legislators intend to keep their promises when it comes to basic needs of our kids, parents, grandparents and neighbors – and, if they don’t, who they’re going to hurt.

Maybe that’s why you’re hearing even prominent budget writers talk about starting to spend down the state’s savings or even raising revenue to pay for these necessities and avoid the need for such deep pain.

Planning for the long run

But the most important budget news last week may have been on the House side, when the Comptroller made a guest appearance at a House Appropriations Committee meeting.

Because, if nothing else, this effort to reconfigure our healthcare and education systems – which those in control are scrambling to finish up in the next few days – could have benefitted from some time, attention and information before the session started.

But what’s done is done.

Why Honesty matters

At this point, I think the Comptroller is right in saying that a problem five years in the making can’t be solved in the last three months of the session.

Reliable information and smart planning are about to become essential. The state’s budget writers are openly eying one-time savings and accounting gimmicks – the sorts of things that might kick the can down the road this year, but will likely end up creating an interim of uncertainty followed by another budget crisis.

It’s a mistake, a big one, to adopt that dangerous approach without committing to reform the system.

That’s why I put forward my Honesty Agenda – a set of reforms that will make information more widely available, ensure Texans know how their money’s being spent, and help the state protect itself from these sorts of budget crises. This legislation will make sure government is transparent, those in control of it are accountable, and the budget is on the side of middle-class Texans.

It would be a mistake to support any budget without such reforms – particularly a budget that embraces gimmickry, spends down savings, increases taxes and weakens moral commitments that keep Texas economically competitive. And I remain hopeful that we can make them law this session.

In the meantime, I guess we’ll all just have to watch, listen, connect all the dots they’ll show us, and brace ourselves for whatever picture we finally see.